Competitive Intelligence 101: The Complete Guide

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November 2, 2023

Competitive Intelligence 101: The Complete Guide

Cars. Airline tickets. Insurance. It doesn’t matter what you sell, you will always face competition. And regardless of how sharp your competitive edge is, your market share is never 100%. But… it can be close. And that’s why you need competitive intelligence (CI).

Also known as competition intelligence or competitor intelligence, CI refers to data-driven insights that help you to know what makes your competitors tick, if they’re winning the business you’re aiming for, and, most importantly, how they’re winning that same business you want to earn.

A good CI strategy can help businesses not only thrive but also survive. The business world is littered with high-profile brands that no longer exist because they somehow fell short in their competitor analysis (or they failed to track what their competitors were doing.)

These brands failed to innovate and adapt, especially when disruptor companies emerged. The list includes Blockbuster, Toys R Us, Polaroid, Tower Records, Compaq computers, and Pets.com. (You remember the sock puppet for that last one, right? Or are we dating ourselves … ?)

What Is Competitive Intelligence?

‍Competitive intelligence is about much more than knowing what the competition is doing, though. It is also a type of marketing intelligence, or all the data that is related to a company’s marketing efforts and other relevant information to consider when developing effective marketing strategies.

The competitive intelligence analysis you conduct can be tactical (short-term) or strategic (longer-term). In either case, the insights you get from the process can help you better understand where your business is positioned within the competitive arena, and the risks, challenges, and opportunities it faces.

The Importance of Competitive Intelligence

Competition intelligence builds on typical market intelligence research and modern-day business analytics by adding rich, customer-focused data to your strategic plan.

Here’s an example: Say that you have competition intelligence indicating a rival has a new ad campaign using messaging different from yours. What if you find that the messaging appears to be resonating well with your target audience? That insight clearly should inform your customer outreach.

Competitive intelligence analysis is important because it helps your entire organization — from your sales team to your marketing and product development departments — multiply their understanding of the market. Ultimately, this enables everyone to make better, more informed decisions for the business.

The Competitive Intelligence Process in 6 Steps

Like every good business strategy, competitive intelligence should have a process. We feel the following six steps are fundamental to succeeding at competitive intelligence analysis:

1. Define Your Business Objectives

Clearly defining overall business objectives focuses your CI efforts from the outset. This ensures that valuable time and resources are spent gathering only relevant business intelligence.

2. Identify Your Competitors

Identify and rank your competitors based on relevancy to your products, the geographies that you operate in, your target audience, and your business.

3. Identify a Type of Competitive Intelligence to Focus on

Determine which types of competitor intelligence will give your business the biggest bang for the buck. Here are some to consider:

Product Intelligence: If you and a competitor have similar products, you’ll want to pay close attention to how and where your competitor is marketing their product, what services and aftercare programs they offer, and how the product is priced and packaged. This data can help position and even differentiate your product in front of customers.

Market Intelligence: This type of intelligence provides a broad view of what’s taking place in your target market. Analysis of market trends, customer behavior, and competitor positioning can enhance your market intelligence. It can also help you identify future opportunities as well as threats, such as the emergence of a market disruptor.

Sales Intelligence: Leverage your sales reps and sales team to gain insight into competitors’ sales strategies, such as if your competitor is doing particularly well selling or building brand awareness over Instagram or on TikTok or other digital channels. Sales intelligence also includes data on pricing and promotions as well as customer acquisition. This is all relatively easy data for your sales team to research and report.

Financial Intelligence: Understanding the financial health of your competitor can be a key indicator of their performance. It can also help you to strategically plan for growth. There’s seldom a better time to expand than when your key competitor is bleeding cash, has taken on too much debt, or has a less-than-stellar IPO showing.

Legal Intelligence: Legal filings, such as lawsuits, patents, and trademarks, are rich sources of information that can provide insight and understanding of a competitor’s intellectual property strategies and potential legal threats. This type of data can help inform your growth strategy and may even identify minefields your business should avoid or tread through with caution.

4. Select Your Sources

Once you’ve decided on the type of competitive intelligence that best suits your business goals, it’s time to nail down the best sources of data to feed that intelligence. These sources can include:

Primary Sources: These sources are by far the richest vein of reliable data on your competitors. You’ll find a wealth of information in customer surveys, customer interviews, and focus groups that ask the right questions about your competitors. Public companies must post very detailed information online. But an often-overlooked primary source is telephone conversations. Conversation intelligence software, such as Invoca’s Signal AI, picks up keywords and insights from customer phone conversations. So, when your customer or prospect mentions the competition, and what they do or don’t like about their product, service, or brand, you’ll have the intelligence at hand. Invoca’s call tracking, recording, and analysis tools are powered by AI and easily capture intelligence and data from every phone conversation with current and potential customers.

Secondary Sources: You can supplement primary source data with information on competitors from industry features, news articles, and other third-party content. Your own sales reps or other industry sources can be valuable secondary sources, too.

Tertiary Sources: Lastly, be sure to scrape the web and online sources such as social media and product reviews. There are various tech tools to help you do this quickly and efficiently.

5. Conduct a Competitive Analysis

Once you have data in hand that details your competitors’ strengths and weaknesses, you can begin a competitive analysis and create actionable data for your business. Your analysis might include:

SWOT Analysis: This approach to competitive analysis involves evaluating the strengths, weaknesses, opportunities, and threats (SWOT) of a competitor or other business you want to study and compare your business to.
Porter’s Five Forces Analysis: Porter’s Five Forces of Competitive Position Analysis is a framework developed by a Harvard professor for analyzing competitive forces within an industry. The five forces are: Supplier power, buyer power, competitive rivalry, product substitution threat, and threat of new entry.

Benchmarking: Benchmarking is a standard process of comparing a business or competitor to industry standards or best practices.

Scenario Planning: In scenario planning, businesses create hypothetical scenarios, such as the threat of disruption, to analyze and explore potential future outcomes for them and their rivals.

Market Segmentation Analysis: Market segmentation analysis involves dividing a market into different segments based on customer needs, preferences, and behaviors.

6. Maintain Ethics and Legal Standards

Competitive intelligence analysis is a legitimate business practice and should not be confused with illegal practices such as industrial espionage or corporate spying. Nevertheless, your process must comply with all ethical and legal standards including:

Compliance with laws and regulations: Ensure you are complying with all relevant laws and regulations related to competitive intelligence and data gathering.
Confidentiality: Do not seek to gather or use confidential or proprietary information about your competitors.
Accuracy and reliability: Confirm that the information you collect and use in your competitive intelligence analysis is both accurate and reliable.

How to Use Competitive Intelligence

There are several ways to use competitive intelligence. Here’s a quick overview of some common use cases you might consider, depending on your business and its objectives:

Use case #1: Market research

One “big picture” use case for CI is market research. This includes analyzing the size and growth potential of the market, identifying customer needs and preferences, and evaluating the competitive landscape.

‍Use case #2: Product development

Competitor intelligence can reveal gaps in the market helping you to develop new products, and better understand competitors’ product features and pricing.

Use case #3: Marketing strategy

CI can deliver a greater understanding of your competitors’ marketing tactics. Competitive intelligence analysis can also help you to identify potential opportunities for differentiation which can, in turn, enhance your overall marketing strategy.

Use case #4: Sales strategy

You can also use competition intelligence to inform your sales team and sales reps by identifying key decision-makers, providing a better understanding of the sales process, and identifying potential objections or challenges to your product.

Use case #5: Strategic planning

Another potential “big picture” use case is strategic planning. Competitor intelligence used in strategic planning can help you identify potential threats and opportunities, assess the strengths and weaknesses of your rivals, and surface areas for business growth or expansion you may not have previously considered.

Benefits of Competitive Intelligence

Investing in competition intelligence does more than help you understand the state of the playing field for your business. These data-driven insights can benefit your organization in other ways, such as:

Identifying New Opportunities: These opportunities can include new market or product opportunities and areas for business or product growth. In other words, competitor intelligence can help you gain a strong competitive advantage out of the gate in a whole new space.
Mitigating Risk: CI can help your business proactively identify potential threats to your market share (and bottom line!) and move swiftly to mitigate or meet those risks head-on.
Enhancing Customer Engagement: Competitive intelligence provides greater insights into customer needs, preferences, and behaviors, enabling your business to build stronger customer experiences and relationships and increase customer loyalty. This insight can provide an edge to sales reps as they work to close sales.
Gaining Real-Time Intelligence: By using artificial intelligence (AI) and cloud-based tools for gathering and analyzing competitor data, competitive intelligence can be delivered in real time. That allows your business to be faster and more agile in responding to changes in the competitive landscape.

3 Future Trends in Competitive Intelligence

As technological innovation drives transformation throughout enterprises, look for competitor intelligence to change, too. Here are some future trends in competitive intelligence to watch:

1. Automation and Artificial Intelligence

Artificial intelligence is already helping businesses gather and analyze competitive intelligence more efficiently and effectively, and this trend will only continue. Automation, machine learning, and natural language processing make it possible for businesses to digitize previously marginalized analog channels, such as phone calls.

Invoca’s AI-powered software, for example, tracks, records, and analyzes thousands of phone calls in real time, providing mountains of new data from the direct voice of the customer. Organizations can mine this data for further intelligence into markets and competitors as well as customers.

2. Social Media and Web Scraping

More and more competitive information is shared online today via websites and social media. Businesses can use social media and web scraping tools to collect and analyze data for competitive intelligence from this vast and ever-growing ocean of insights.

3. Predictive Analytics

With technological advancement comes greater access to deeper analysis of reliable, historical, and real-time data from a wide variety of sources, including unstructured data like audio and customer feedback. Businesses can use AI and machine learning tools for data analysis to make predictions about future trends and developments in the competitive landscape more confidently and accurately.

See Competitive Intelligence in Action with Invoca

Competitive intelligence is most valuable to your organization when you can access and analyze reliable, relevant data at scale and use it to make data-driven decisions quickly and confidently.

Invoca’s conversation intelligence platform, which is powered by AI, can collect and analyze data from every phone call made to and from a business. This huge database of primary source information can be leveraged throughout the enterprise, but especially as part of competitive intelligence analysis.

Phone calls provide direct, incontrovertible access to the voice of the customer. Businesses can confidently use that knowledge to create unique, actionable insights to benefit sales and marketing teams and help drive business growth.